Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
Gold and Silver - The Two Horsemen - 11th Nov 19
Towards a Diverging BRIC Future - 11th Nov 19
Welcome to the Zombie-land Of Stock Market Investing - 11th Nov 19
Illiquidity & Gold And Silver In The End Game - 11th Nov 19
Key Things You Need to Know When Starting a Business - 11th Nov 19
Stock Market Cycles Peaking - 11th Nov 19
Avoid Emotional Investing in Cryptocurrency - 11th Nov 19
Australian Lithium Mines NOT Viable at Current Prices - 10th Nov 19
The 10 Highest Paying Jobs In Oil & Gas - 10th Nov 19
World's Major Gold Miners Target Copper Porphyries - 10th Nov 19
AMAZON NOVEMBER 2019 BARGAIN PRICES - WD My Book 8TB External Drive for £126 - 10th Nov 19
Gold & Silver to Head Dramatically Higher, Mirroring Palladium - 9th Nov 19
How Do YOU Know the Direction of a Market's Larger Trend? - 9th Nov 19
BEST Amazon SMART Scale To Aid Weight Loss for Christmas 2019 - 9th Nov 19
Why Every Investor Should Invest in Water - 8th Nov 19
Wait… Was That a Bullish Silver Reversal? - 8th Nov 19
Gold, Silver and Copper The 3 Metallic Amigos and the Macro Message - 8th Nov 19
Is China locking up Indonesian Nickel? - 8th Nov 19
Where is the Top for Natural Gas? - 7th Nov 19
Why Fractional Shares Don’t Make Sense - 7th Nov 19
The Fed Is Chasing Its Own Tail; It Doesn’t Care What You Think - 7th Nov 19
China’s path from World’s Factory to World Market - 7th Nov 19
Where Is That Confounded Recession? - 7th Nov 19
FREE eBook - The Investment Strategy that could change your future - 7th Nov 19
Is There a Stock Market Breakout Ahead? - 6th Nov 19
These Indicators Aren’t Putting to an Economic Resurgence - 6th Nov 19
Understanding the Different Types of Travel Insurance - 6th Nov 19
The Biggest Gold Story Of 2020 - 6th Nov 19
Best Money Saving FREE Bonfire Night Fire Works Show Sheffield 2019 - 5th Nov 19
Is the Run on the US Dollar Due to Panic or Greed? - 5th Nov 19
Reasons Why Madrid Attracts Young Professionals - 5th Nov 19
Larger Bullish Move in USD/JPY May Just Be Getting Started - 5th Nov 19
Constructive Action in Gold & Silver Stocks - 5th Nov 19
The Boring Industry That Hands +500% Gains - 5th Nov 19
Stock Market Chartology vs Fundamentals - 4th Nov 19
The Fed’s Policy Is Like Swatting Flies with Nuclear Weapons - 4th Nov 19
Stock Market Warning: US Credit Delinquencies To Skyrocket In Q4 - 4th Nov 19
Stock Market Intermediate Topping Process Continues - 4th Nov 19
Stock Market $SPY Expanded Flat, Déjà Vu All Over Again - 4th Nov 19
How To Buy Gold For $3 An Ounce - 4th Nov 19

Market Oracle FREE Newsletter

How To Buy Gold For $3 An Ounce

When Net Worth Becomes Net Survival

Commodities / Gold and Silver 2015 Jun 22, 2015 - 05:17 PM GMT

By: Dr_Jeff_Lewis

Commodities

In a world of full of concessions, and a financial system rife with complexity, it is often too easy to lose sight of basic economic principles. This is especially true when it stops becoming a show that you watch and begins to be a reality you experience. 

We’ve all been astounded at one point or another when confronted by the layer upon layer of law and complexity around income tax. Your taxes have nothing to do with the government's need for money. 


The father of income tax, Beardsley Ruml, in a discussion about how the function of taxes changed after the nation exited the gold standard, wrote about the merits of corporate taxes. This must also read includes his statements regarding taxes without a gold standard:

Ruml is the former Chairman of the Federal Reserve Bank of New York and instigator of federal income tax withholding. He states that, in a fiat currency system, governments can create infinite money and, in doing so, they are limited only by potential debasement of the currency. He also states that taxes thereby have nothing to do with raising revenue, but rather, are instruments of social policy and control.

Ruml states, “…inconvertible currency, a sovereign national government is finally free of money worries and need no longer levy taxes for the purpose of providing itself with revenue… It follows that our Federal Government has final freedom from the money market in meeting its financial requirement.

All federal taxes must meet the test of public policy and practical effect. The public purpose which is served should never be obscured in a tax program under the mask of raising revenue.” 

He goes on to explain how, with Federal spending not revenue constrained, the first function of taxation is to regulate the value of the dollar, which we know as regulating inflation. The notion of the Federal government ‘running out of money’ and ‘dependence on foreign borrowing’ as well as ‘sustainability’ are all categorically inapplicable. 

The revenue story is the psychological anchor - the social backing -keeping us all in line with the destruction and consolidation of politics, power, and industry to the point where real organic growth is an almost accidental rarity. ‘Revenue’ is gone it ‘disappeared’ long ago.

It’s all debt service. As we struggle to pay the ‘vig’, confidence erodes. And we accelerate toward the event horizon. Like a massive cargo vessel, the dollar is slow to turn back toward home. An emergency it seems to take an eternity. So we forget. And the dollars return slowly, then all at once, as they are thrown desperately overboard in attempts to survive. 

It is a certainty. Not a prediction. If history documented 10%, 20%, or even more of all fiat currencies have survived, would that be enough to maintain your confidence? If history said that eighty percent of the time, fiat currencies failed — is an equally predictable time frame?  But in reality, zero have survived. Why would historians make that error? Certainly there is motive to find at least one example. 

So much for the victors and their power of the written word. 

Concessions around the deeper realities are useful. They serve to reach people where they are. Income taxation keeps us distracted from real inflation. 

The formula for hyperinflation concedes that massive debts require massive servicing. We don’t collect enough to meet that at normal rates of interest. Budget deficit numbers and perception can be fudged for all eternity, but ultimately, it is the massive flow of coming payments that will require equally massive bond offering. 

Once rates begin to rise on the long end of the curve, the portion where there is no direct control, the cycle begins to accelerate. Extraordinary measures, from capital controls, to bail INS, to declarations of the end of cash--all justified. And then war unravels it all. 

Once we’ve gone past the point of no return, when the reserve currency collapses, the funding mechanisms die. The financial infrastructure fails and we are left sitting high, dry, and suddenly very local. 

A cleansing no one likes to think about. Net worth becomes anchored to net survival. Worry over how much my silver and gold are worth are secondary issues when no one know the value of the measuring stick. 

For more articles like this, and/or for a breath of fresh silver market reality amidst the stench of denial and technically meaningless short term price obsessed madness, check out http://www.silver-coin-investor.com

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com

    Copyright © 2015 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Dr. Jeff Lewis Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules